Below is a bank-grade acceptance checklist for receiving a USD 4.5B Reg S insured note for monetization or placement, written exactly in the format banks, trustees, and credit committees expect.

This is neutral, professional, and defensive—protects you as recipient/intermediary.

Reg S Insured Note – Bank Acceptance Requirements

A. Client / Issuer Deliverables (MANDATORY)

1. Wealth Management / Custody Account

   • Client must open and maintain an approved wealth management or custody account

   • Account name must match legal holder of the note

   • Used for:

     • Asset receipt

     • Interest flows

     • Insurance beneficiary designation

2. Identified Insurer + Insurance Binder

   • Rated insurer (or Lloyd’s syndicate)

   • Binder issued in advance

   • Binder must state:

     • Coverage amount

     • Instrument reference

     • Term aligned to note maturity

     • Irrevocable / non-cancellable

     • Bank named as loss payee / beneficiary

3. Final Offering Documents

   • Offering Memorandum / Information Memorandum

   • Note Purchase Agreement

   • Trust Deed (if applicable)

   • Legal Opinion (issuer counsel)

   • Reg S representation letter (non-US persons)

4. Security Identification

   • ISIN mandatory

   • CUSIP (if applicable)

   • Clear instrument description:

     • Seniority

     • Coupon

     • Tenor

     • Governing law

B. Settlement & Delivery Requirements

5. DTC / Euroclear / Clearstream Eligibility

   • Note must be:

     • Book-entry eligible

     • Freely transferable under Reg S

   • Delivery via:

     • DVP / FOP (depending on structure)

     • Correct depository participant codes

6. SWIFT Messaging

   • MT540–543 (securities delivery)

   • MT760 (if guarantee / insurance confirmation is referenced)

   • MT799/199 for confirmations as required

7. Hard Copy Instrument (If Required)

   • Only if the structure calls for physical confirmation:

     • Bonded bank-to-bank courier

     • Tamper-evident packaging

     • Tracking and receipt acknowledgment

   • No client-hand-carried instruments accepted

C. Compliance & Risk Documentation

8. Full KYC / KYI / KYB

   • Ultimate Beneficial Owner (UBO)

   • Source of funds / source of assets

   • Corporate structure chart

   • Passport & corporate registry documents

9. Sanctions & AML Clearance

   • OFAC / UN / EU screening

   • Enhanced due diligence (EDD) for size > $1B

10. Proof of Insurance Authenticity

    • Direct insurer verification

    • Underwriter signatory confirmation

    • Reinsurance schedule (if layered)

D. Bank Acceptance Conditions

11. Credit Committee Approval

    • Insurance credit substitution approved

    • LTV / discount approved

    • Tenor risk approved

12. No Conditional Insurance

    • Insurance must be active before acceptance

    • “Post-closing insurance” is rejected

13. No Embedded / Implied Coverage

    • Insurance must be explicit, separate, verifiable

E. Your Risk Position (IMPORTANT)

Your Risk Is LIMITED IF YOU DO THIS CORRECTLY

You should ensure:

• You do not take title to the note

• You act as:

  • Custodian

  • Receiving bank

  • Placement intermediary

• Acceptance is subject to verification and committee approval

• Funds are not advanced prior to:

  • Settlement

  • Insurance confirmation

  • Clearing delivery

F. Indemnity & Protection (YOU MUST REQUIRE)

14. Issuer Indemnity Agreement

• Indemnifies you against:

  • Fraud

  • Misrepresentation

  • Invalid issuance

  • Insurance failure

15. Non-Reliance & Hold Harmless

• You rely on:

  • Issuer representations

  • Insurer confirmations

  • Clearing system validation

16. No Obligation to Monetize Clause

• Acceptance ≠ obligation to fund or place

• Absolute discretion retained

17. Legal Opinion Reliance Clause

• Counsel opinions are issuer-provided

• No duty to independently opine

G. Practical Reality (Important)

For a $4.5B Reg S note, banks typically require:

• Tranching (e.g. $500M–$1B blocks)

• Layered insurance

• Staged settlement

• Escrowed insurance premiums

This is normal and expected.

One-Line Rule to Protect You

If the note is not insured, cleared, verified, and delivered before monetization, you do not accept liability.